Market Analysis – April 6, 2022
Courtesy of: Drew Haynen, Van Zee Commodities LLC
The cattle market has been fairly stagnant over the last 2 weeks, ranging from $142/cwt to $135/cwt. The cash market has not picked up at all in the last couple weeks. Boxes have been trading higher which just gives packers more profit. Several countries are struggling with Covid again, which is hurting the export market. The other big worry in the market is the inflation that is happening. This is giving the middle and lower classes less disposable income to buy expensive beef. The cattle in the north are getting cleaned up and it looks like packers are going to have to start to push the bids in order to get cattle, but the southern states still seem to have enough willing sellers to keep cash at bay. Hopefully the rally will begin soon, and we can see the cattle market improve.
The feeder cattle market is down a little in the last 2 weeks but has also had some big swings. I still believe that feeder cattle can have a nice rally ahead, but live cattle will have to lead the way. The corn market will also need to settle in a range so feedlots can predict the cost of gains and feel more confident in the amount of money they will have in their fat cattle.
The grain market has been in a range moving from about 760 in corn to 700. The USDA report last week was fairly bullish on corn with acres down about 2 million from average predictions with soybeans picking up all of those acres. This made soybeans bearish. I believe the change in acres was mostly from fertilizer prices this year. The war in Ukraine has been very interesting the last couple weeks with Ukraine pushing Russia out of the capital but losing some ground in the eastern part. According to some sources, Ukraine is starting to plant, and it is actually going fairly well where there is no war. So, if they get 75% planted, will they get it harvested on time? Will Russia just take the crop? Will the ports be open, and ships be willing to load grain? Will the ports belong to Russia or Ukraine? There are still so many unknows. Cold weather forecasted to persist until the middle of April is also influencing the market. Early corn and beans look unlikely to get into the ground.
|Cattle and Grain Markets for April 1, 2022|
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Sheep and hay data compiled by Ross Bronson, Ag Risk Consultant, Redd Summit Advisors
Markets were steady to higher this week with San Angelo $15-$20 higher compared to last week. New Holland, PA trended steady. Fredericksburg was $5-$10 higher, and Hamilton was steady. Goldthwaite came in $10-20 higher this week as well. The USDA estimated domestic lamb and mutton meat production for the week ending March 26th totaled 2.45 million pounds on a slaughter count of 36,000 head compared to 2.14 million pounds and 32,000 head the previous week. Imported lamb and mutton meat for the week ending March 19th totaled approximately 5.24 million pounds which equates to 245 percent of the domestic production for the same period.
|Sheep markets for week ending April 1st, 2022|
|Current Week||Prior Week||Percent Change||Prior Year||Percent Change|
|Feeder Lamb Prices, Medium and Large 1-2, 60-90 lbs, Wtd Avg, $/cwt.|
|Ft Collins, CO||$260.00||$261.09||-0.4%||NQ||NA|
|Sioux Falls, SD||$303.28||NQ||NA||NQ||NA|
|Light Weight Slaughter Lamb Prices, Choice & Prime 1-3, 60-90 lbs, Wtd Avg, $/cwt.|
|San Angelo, TX||$338.55||$320.00||5.8%||$259.40||30.5%|
|New Holland, PA||$399.86||$398.94||0.2%||$303.25||31.9%|
|Slaughter Lamb Prices, Wtd Avg, $/cwt.|
|Neg. Pur. Live||$216.24||$214.68||0.7%||$181.47||19.2%|
|Form. Pur. Carcass Base||NQ||NQ||NA||NQ||NA|
|Comp.-Form. & Neg.Carcass Base||NQ||NQ||NA||NQ||NA|
** Not Applicable
Over the last week or two there has been some movement in hay stores in California. New crops are starting to come in there. The Desert Southwest is also showing some movement but a lot of it is last years hay has some areas prepare to begin harvest. The Great Basin and Pacific Northwest have shown light to no trading. Prices are steady to higher across the west. The continued concern is input costs and yields as growers look to the new season’s crop. Forward contracting is the name of the game as of now, but contract stipulations are often tough with many touching on quality concerns for the higher priced hay.